The bosomy blonde in a tight, low-cut evening dress slid on to a barstool next to me and began the chat: Where are you from? How long are you here? Where are you staying? I asked her what she did for a living. "You know what I do," she replied. "I'm a whore."

As I looked around the designer bar on the second floor of the glitzy five-star hotel, it was obvious that every woman in the place was a prostitute. And the men were all potential punters, or at least window-shoppers.

While we talked, Jenny, from Minsk in Belarus, offered me "everything, what you like, all night" for the equivalent of about £500. It was better if I was staying in the luxurious hotel where we were drinking, she said, but if not she knew another one, cheaper but "friendly". I turned down the offer.

This was not Amsterdam's red-light district or the Reeperbahn in Hamburg or a bar on Shanghai's Bund. This was in the city centre of Dubai, the Gulf emirate where western women get a month in prison for a peck on the cheek; the Islamic city on Muhammad's peninsula where the muezzin's call rings out five times a day drawing believers to prayer; where public consumption of alcohol prompts immediate arrest; where adultery is an imprisonable offence; and where mall shoppers are advised against "overt displays of affection", such as kissing.

Ayman Najafi and Charlotte Adams, the couple recently banged up in Al Awir desert prison for a brief public snog, must have been very unlucky indeed, because in reality Dubai is a heaving maelstrom of sexual activity that would make the hair stand up on even the most worldly westerner's head. It is known by some residents as "Sodom-sur-Mer".

Beach life, cafe society, glamorous lifestyles, fast cars and deep tans are all things associated with "romance" in the fog-chilled minds of Europeans and North Americans. And there is a fair amount of legitimate "romance" in Dubai. Western girls fall for handsome, flash Lebanese men; male visitors go for the dusky charms of women from virtually anywhere. Office and beach affairs are common.

But most of the "romance" in Dubai is paid-for sex, accepted by expatriates as the norm, and to which a blind eye is turned – at the very least – by the authorities. The bar where "Jenny" approached me was top-of-the-range, where expensively dressed and coiffured girls can demand top dollar from wealthy businessmen or tourists.

There are lots of these establishments. Virtually every five-star hotel has a bar where "working girls" are tolerated, even encouraged, to help pull in the punters with cash to blow. But it goes downhill from there. At sports and music bars, Fillipinas vie with the Russians and women from the former Soviet republics for custom at lower prices. In the older parts of the city, Deira and Bur Dubai, Chinese women undercut them all in the lobbies of three-star hotels or even on the streets (although outside soliciting is still rare).

It is impossible to estimate accurately the prostitute population of Dubai. The authorities would never give out such figures, and it would be hard to take into account the "casual" or "part-time" sex trade. One recent estimate put the figure at about 30,000 out of a population of about 1.5 million. A similar ratio in Britain would mean a city the size of Glasgow and Leeds combined entirely populated by prostitutes.

Of course, there are other cities in the world where the "oldest profession" is flourishing. But what makes Dubai prostitution different is the level of acceptance it has by the clients and, apparently, the city's Islamic authorities. Although strictly illegal under United Arab Emirates' and Islamic law, it is virtually a national pastime.

I have seen a six-inch-high stack of application forms in the offices of a visa agent, each piece of paper representing a hopeful "tourist" from Russia, Armenia or Uzbekistan. The passport-sized photographs are all of women in their 20s seeking one-month visas for a holiday in the emirate.

Maybe young Aida from Tashkent – oval-eyed and pouting – will find a few days' paid work as a maid or shop assistant while she's in Dubai, and maybe she will even get an afternoon or two on the beach as her holiday. But most nights she will be selling herself in the bars and hotels and the immigration authorities know that. So must the visa agent, who gets his cut out of each £300 visa fee.

The higher you go up the Emirati food chain, the bigger the awards. All UAE nationals are entitled to a number of residence visas, which they routinely use to hire imported domestics, drivers or gardeners. But they will sell the surplus to middlemen who trade them on to women who want to go full-time and permanent in the city. The higher the social and financial status of the Emirati, the more visas he has to "farm".

Thousands of women buy entitlement to full-time residence, and lucrative employment, in this way. Three years in Dubai – the normal duration of a residence visa – can be the difference between lifelong destitution and survival in Yerevan, Omsk or Bishkek.

With a residence visa changing hands at upwards of £5,000 a time, it is a nice sideline, even for a wealthy national. And it also ensures a convenient supply of sex for Emiratis, who form a large proportion of the punters at the kind of bar where I met "Jenny". Arabs from other countries are high up the "johns" list, with Saudis in particular looking for distraction from life in their austere Wahabist homes with booze and sex-fuelled weekends in Dubai's hotels.

The other big category of punters is Europeans and Americans, and it is remarkable how quickly it all seems normal. A few drinks with the lads on a Thursday night, maybe a curry, some semi-intoxicated ribaldry, and then off to a bar where you know "that" kind of girl will be waiting. In the west, peer group morality might frown on such leisure activities, but in Dubai it's as normal as watching the late-night movie.

Male residents whose families are also in Dubai might be a little constrained most of the year – you could not really introduce Ludmilla from Lvov, all cleavage and stilettos, as a work colleague with whom you wanted to "run over a few things on the laptop". But in the long, hot summer it is different. Wives and families escape the heat by going to Europe or the US, and the change that comes over the male expat population is astounding. Middle-aged men in responsible jobs – accountants, marketeers, bankers – who for 10 months of the year are devoted husbands, transform in July and August into priapic stallions roaming the bars of Sheikh Zayed Road.

Tales are swapped over a few beers the next night, positions described, prices compared, nationalities ranked according to performance. It could be the Champions League we are discussing, not paid-for sex.

I've heard financial types justifying it as part of the process of globalisation, another manifestation of the west-east "tilt" by which world economic power is gravitating eastwards.

In my experience, many men will be unfaithful if they have the opportunity and a reasonable expectation that they will not be found out. For expats in Dubai, the summer months provide virtual laboratory conditions for infidelity.

Above all, there is opportunity. There is the Indonesian maid who makes it apparent that she has no objection to extending her duties, for a price; the central Asian shop assistant in one of the glittering malls who writes her mobile number on the back of your credit card receipt "in case you need anything else"; the Filipina manicurist at the hairdresser's who suggests you might also want a pedicure in the private room.

Even though selling sex is haram (forbidden) under Islamic law, the authorities rarely do anything about it. Occasionally, an establishment will break some unwritten rule. Cyclone, a notorious whorehouse near the airport, was closed down a few years back, but then it really did go too far – a special area of the vast sex supermarket was dedicated to in-house oral sex. When the authorities ordered it to be closed, the girls simply moved elsewhere.

There are occasional stories in the local papers of human trafficking rings being broken up and the exploiters arrested, but it is low-level stuff, usually involving Asian or Chinese gangs and Indian or Nepalese girls. The real problem is the high-end business, with official sanction. Even with the emirate's financial problems, Sodom-sur-Mer is flourishing. But would-be snoggers beware – your decadent behaviour will not be tolerated.

William Butler is a pseudonym for a writer who lived in Dubai for four years and recently returned to Britain